It is interesting to note that French President Nicholas Sarkozy played the lead in getting Mr. Papandreou to change the terms of the referendum to an "in-or-out" of the Eurozone question. The process was characterised as "psychological warfare" by Fracois Baroin, French Finance Minister at the time.

As Peter Spiegel writes:

The meeting would leave many participants shell-shocked. In his journal, François Baroin, Mr Sarkozy’s finance minister, would call it “psychological warfare”. Others, particularly the EU’s two presidents, would later tell associates they were extremely uncomfortable with a small group of European leaders forcing the hand of the elected prime minister of a sovereign country. “For me, I have never seen a meeting so tense and so difficult,” said another aide.

Once Mr Papandreou and Mr Venizelos arrived in the conference room, Mr Sarkozy began what one official called “the full Sarkozy”: a pointed, angry denunciation of Mr Papandreou’s referendum decision.

“Clearly the feeling was: We’ve done everything to help you, we’ve done everything to keep you in the eurozone, we’ve taken financial, political risk,” said a member of France’s delegation. “It’s the biggest debt restructuring in the world, ever, and now what you do is you betray us.

Mr Papandreou was taken aback. “He goes there and he starts ranting and raving on the referendum,” he said of Mr Sarkozy. Added Mr Venizelos: “The position of Sarkozy was very offensive. It was not polite. Very, very strong and very offensive, in order to put Greece in a dilemma: in or out.” ....

Those in the room said Mr Papandreou visibly deflated as the fight continued. As he fatigued, Mr Venizelos took up the battle, a sign many saw as the sudden realisation by the Greek prime minister that he had become a spent political force – and Mr Venizelos, who had long coveted the premiership, was moving to exploit the change in circumstances.

I remember very clearly the total disarray in the Papandreou government at the time (blog entries below).

Spiegel's article is also illuminating of the role played by European Commission President Manuel Barroso. According to Spiegel, Barroso had reached out to ND leader Antonis Samaras, in hopes of getting him to join a national coalition government (something that Samaras had been avoiding). With Barroso's call, Samaras agreed to join. Remarkably, Barroso implemented this call on his own:

It was a shift in body language that caught the attention of Mr Barroso, who had sat quietly through most of the fireworks. The European Commission president would later tell associates that the scene playing out in front of him was making him increasingly alarmed. On top of the loose talk of a Greek euro exit, which commission officials long believed would trigger uncontrollable market panic throughout southern Europe, the prospect of a month-long referendum campaign would have sown weeks of uncertainty – exactly what they were trying to avoid as Italian bond yields were rising to dangerous levels.

Unbeknown to Mr Sarkozy or Ms Merkel, Mr Barroso had called Mr Samaras, the Greek opposition leader, from his hotel before the meeting. He knew Mr Samaras was desperate to avoid the referendum.

Mr Samaras told Mr Barroso he was now willing to sign on to a national unity government between his New Democracy party and Pasok – something he had assiduously avoided for months in the hopes he could secure the premiership on his own.

The Cannes debacle led to the appointment of a "caretaker" Prime Minister, Loucas Papademas, who was put in place to pass further austerity measures and smooth the way for PSI. In May 2012, the next Greek elections were fought, leading to a two-round cliffhanger in which SYRIZA and New Democracy both tried to form a coalition.

What is striking today is not really how much the European narrative has changed, with a "successful" bond sale in Greece and the recapitalisation of Greek banks. It is precisely how little Greece has changed. In contrast to Cyprus or Ireland, there have been no substantive reforms which would lay the foundation of long-term macroeconomic or macro-prudential competitiveness.

There have been short-term, budget-oriented reforms in areas such as minimum wage decreases, pension cuts, and certain cosmetic changes to company registration. But nothing that has fundamentally changed the operation of the public sector, or its poor standard of governance. The IMF / Troika prescriptions have followed a textbook which assumes real political and social compliance with the concept of export-driven growth. Any sense compliance has been distorted and destroyed by the machinations of the Greek political system, as daily reports in the national and international press show.

Besides the continuing political corruption and incompetence, what is particularly appalling is the inequality which has now been entrenched in the socio-economic system. The minimum wage reduction has created a massive underclass of what can only be termed wage slaves. These are usually poorly-qualified youth, women and elderly employees who accept unreported employment at wages of EUR 250-300 per month for a 40-hour workweek. High unemployment and the total lack of enforcement of labour regulations contribute to this.

As a result, headline GDP numbers and public finance numbers appear to improve, while actual conditions in the economy deteriorate or adapt to a depression-level equilibrium. It is a recovery without any sense of equitable strategic planning for the day after, and without any real change in behaviour by the entrenched elites in the country.

And as Spiegel's article shows, there is almost no real coordination at the European level. The Crimean / Ukrainian crisis is only the latest manifestation of this, of course. With the European Parliamentary elections coming up later this month, this makes for depressing reading.

The European Parliament has been running an advertising campaign in Greece and Cyprus under the headline "This May, decide who will command in Europe". The idea is that the average citizen will decide.

Yet as Spiegel's article on the Cannes summit shows, that democratic deficit is alive and well in Europe. The Cyprus bail-out and many other examples are sufficient for this, as is the depressing line-up of political has-beens that most Greek (and Cypriot) parties have nominated for the elections. Given that the candidates themselves have not been vetted directly by the public, but have been nominated by the parties using internal procedures, it is hard to see how anyone would buy that electoral campaign promise.

"Greece, following its decline to the Partly Free category in 2012, fell a further five points in 2013. This was caused in large part by the government’s abrupt shutdown of the public broadcaster Hellenic Broadcasting Corporation (ERT) in an opaque manner in June. A new entity, New Hellenic Radio, Internet and Television (Nerit), will launch in 2014 with a drastically reduced staff. In addition, the year featured an increase in libel cases and the use of surveillance against journalists, as well as the nontransparent awarding of telecommunications licenses," the report said.

While Greece had the worst ranking in the entire European Union, the press in Italy (64th), Hungary (71st), Bulgaria (78th), Croatia (83rd), Romania (84th) were also deemed only "partly free".

This story occurs against an intensely political background of the role of the press in Greece. Stylianos Papathanassopoulos has an excellent English-language review of the background of the deregulation of the press in Greece (The Politics and the Effects of Deregulation on Greek Television) published in the European Journal of Communication (1997). This provides excellent background reading on deregulation and why both the deregulated system but also the state-controlled system have failed.

Reuters ran an article on the Greek press, special interest and corruption in 2012 (Special Report: Greece's Triangle of Power), which provides a series of snapshots of conflicts of interest between the government and media. Reading about Simos Kedikoglou, the government spokesman, wanting to "normalise" the Greek media sector only a few months before the shut-down of ERT is a good example of the Orwellian approach to governance in this country. Kostas Vaxevanis, publisher of Hot Doc and the Greek journalist who published the Lagarde list of 2000 names of Greek bank deposit-holders in Switzerland, wrote an article on OpenDemocracy.net (Corruption, fear and silence: the state of Greek media today) in 2013 in which he quotes:Greece lives in the grip of a peculiar state within the state. The role of journalism is trimmed and those who defend it are being targeted. Silence and concealment is one issue. The second is that an effort is being made to criminalize the investigation of the truth in opposition to the public’s right to transparent and accountable journalism. In essence, the basic journalistic functions of public scrutiny have been neutralised.

The analysis discloses that, despite the proliferation of policy actors and norms, brought about by the liberalisation of the media sector, technological developments and regulatory pressures stemming beyond the state, Greek media policy-making has remained highly centralised in the hands of the government of the day. This cabinet-centred model of media policy-making has been thoroughly influenced, albeit in opaque and informal ways, by powerful economic and business interests who have sought to gain power, profit, or both, at the expense of the normative functions that the media is expected to perform in the public interest. The limited involvement of independent bodies in policy-making, the absence of journalistic professionalism, and the lack of a strong civil society that is able and willing to defend media freedom and independence have all reinforced such trends.

All good intentions to the contrary, none of this is likely to change soon.

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